Correlation Between Fast Retailing and Nihon Kohden
Can any of the company-specific risk be diversified away by investing in both Fast Retailing and Nihon Kohden at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Fast Retailing and Nihon Kohden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fast Retailing Co and Nihon Kohden, you can compare the effects of market volatilities on Fast Retailing and Nihon Kohden and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Fast Retailing with a short position of Nihon Kohden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and Nihon Kohden.
Diversification Opportunities for Fast Retailing and Nihon Kohden
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fast and Nihon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and Nihon Kohden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nihon Kohden and Fast Retailing is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Fast Retailing Co are associated (or correlated) with Nihon Kohden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nihon Kohden has no effect on the direction of Fast Retailing i.e., Fast Retailing and Nihon Kohden go up and down completely randomly.
Pair Corralation between Fast Retailing and Nihon Kohden
If you would invest 24,795 in Fast Retailing Co on September 14, 2024 and sell it today you would earn a total of 8,795 from holding Fast Retailing Co or generate 35.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.46% |
| Values | Daily Returns |
Fast Retailing Co vs. Nihon Kohden
Performance |
| Timeline |
| Fast Retailing |
| Nihon Kohden |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fast Retailing and Nihon Kohden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and Nihon Kohden
The main advantage of trading using opposite Fast Retailing and Nihon Kohden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, Nihon Kohden can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Nihon Kohden will offset losses from the drop in Nihon Kohden's long position.| Fast Retailing vs. Industria de Diseno | Fast Retailing vs. Aritzia | Fast Retailing vs. Shoe Carnival | Fast Retailing vs. Genesco |
| Nihon Kohden vs. Anterix | Nihon Kohden vs. Olympic Steel | Nihon Kohden vs. Fast Retailing Co | Nihon Kohden vs. LB Foster |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Directory module to find actively traded commodities issued by global exchanges.
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